Pakistani startups have continued to remain high on global investors’ radar.
The travel/ ticketing startup ‘Bookme’ and beauty/ fashion startup ‘Bagallery’ have attracted a combined $12 million in advanced round of fund raising.
Bookme, “the largest online travel and ticketing platform in the country”, has raised $7.5 million in its Series A round, according to its founder Faizan Aslam, Bloomberg reported on Thursday.
Bagallery separately raised $4.5 million in a similar round, its Co-Founder Salman Sattar told the international media outlet.
Both rounds were co-led by Zayn Capital, Lakson Venture Capital and Hayaat Group.
Global investment in Pakistani startups has reached $310 million this year, crossing the $300 million level.
“It is a record high investment. It is more than what the country has attracted cumulatively over the past six years.”
Pakistan has a huge potential to attract foreign funding since it has largely remained untapped. The country has adopted technology-driven solutions at an accelerated pace during the pandemic.
The combined international funding of around $310 million in local startups was more than what companies raised at the Pakistan Stock Exchange this year, it was learnt.
Many global venture capital firms have invested for the first time in the current wave including Kleiner Perkins, an early investor in Google and Amazon.com Inc.
“Pakistan’s e-commerce industry is just picking up with online retail accounting for about 2% of gross domestic product (GDP), compared with 20% in Indonesia,” Bloomberg said.
Alibaba Group Holding’s Daraz Group is expected to double its retail volume every year over the next five years, sustaining the pace of the past four years.
Earlier, around 52 startups raised over $300 million in the sector including transport and mobility, logistics, e-commerce, fintech, healthcare and freight in the first nine months of 2021, according to Alpha Beta Core (ABC).
“Average deal size increased five times to $5.9 million in the first nine months (Jan-Sept) of 2021 compared to $1.2 million in 2020 with foreign participation growing massively.”
Among the prominent ones were Airlift and Bazaar, which fetched $85 million and $30 million respectively in advanced-level Series B and Series A fund raising, according to Arif Habib Limited.
Besides, QisstPay, TAG and Oraan got $15 million, $12 million and $3 million respectively in initial-level seed financing.
Startup financing increased in the backdrop of Covid-19, as they presented technology-based business models to facilitate people amid lockdowns.
The startups would continue to fetch significant financing, as there was ample liquidity available with global investors, while interest rates had remained low in advanced countries, ABC CEO Khurram Schehzad said.
“Pakistan being a highly untapped market will remain in their focus with the regulatory regime becoming accommodative (in the country),” he added.
The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) have relaxed rules for attracting investment in technology-based business solutions, he underlined.
They have allowed Pakistanis to set up holding companies abroad and attract investment through those companies into the country, he pointed out.
Published in The Express Tribune, December 10th, 2021.